Question

Exercise 3-5 Preparing adjusting entries-accrued revenues and expenses LO P3, P4 a. M&R Company provided $2,000 in services to customers in December. Those customers are expected to pay the company sometime in January following the company's year-end. b. Wage expenses of $1,000 have been incurred but are not paid as of December 31. c. M&R Company has a $5,000 bank loan and has incurred (but not recorded) 8% interest expense of $400 for the year ended December 31. The company will pay the $400 interest in cash on January 2 following the company's year-end. d. M&R Company hired a firm that provided lawn services during December for $500. M&R will pay for December lawn services on January 15 following the company's year-end. e. M&R Company has earned $200 in interest revenue from investments for the year ended December 31. The interest revenue will be received on January 15 following the company's year-end. f. Salary expenses of $900 have been earned by supervisors but not paid as of December 31. Prepare year-end adjusting journal entries for M&R Company as of December 31 for each of the above separate cases. View transaction list Journal entry worksheet < 1 2 3 4 5 6 M&R Company provided $2,000 in services to customers in December. Those customers are expected to pay the company sometime in January following the company's year-end. Note: Enter debits before credits. Transaction General Journal Debit Credit

Answer 1

Solution:

No.	Account title and explanation	Debit	Credit
1	Accounts receivable	2000
	Service revenue		2000
2	Salaries and Wages Expense	1000
	Salaries and wages Payable		1000
3	Interest expense Dr	400
	Interest Payable		400
4	Lawn expenses	500
	Accounts payable		500
5	Interest receivable	200
	Interest revenue		200
6	Salaries and Wages Expense	900
	Salaries and wages Payable		900